US: Coke to Examine Overseas Labor Practices

ANN ARBOR, Mich. - The Coca-Cola Co.
says it is willing to examine its labor and business practices in India and
Colombia to keep $1.3 million worth of contracts with the University of
Michigan.

The university decided Friday that it would renew contracts
with the world's biggest beverage company only on a conditional basis until the
company performs an independent audit and puts a corrective plan in place, said
Frank Stafford, chairman of the school's Vendor Code of Conduct Dispute Review
Board.

Atlanta-based Coca-Cola has for years
faced questions about its labor practices abroad, and college students have
levied some of the most vocal complaints. The company has repeatedly denied
allegations of environmental and human rights abuses, but officials said they
would look into the matter.

"Although we believe the allegations that
led to their decision will ultimately be proven to be untrue, we appreciate the
manner in which the dispute review board has engaged with our company in
researching the allegation," Coca-Cola spokeswoman Kari Bjorhus said.


Michigan's decision was prompted by a complaint last year by Students
Organizing for Labor and Economic Equality.

The student group accused
Coca-Cola of draining the water table in India, causing farmers' crops to go
dry; distributing bottling plant sludge containing contaminants to Indian
farmers as fertilizer; selling products that contain pesticides in India; and
conspiring with paramilitary groups in Colombia to harass and harm union
members.

"The main issue ... is that the university is pandering to
corporate interests and not necessarily to its constituents, the students," said
Saamir Rahman, a 19-year-old junior and member of the group.

At Coke's
annual meeting in April, chief executive Neville Isdell promised to continue to
listen to the critics, though he insisted there is no proof of their claims.
Even so, Isdell conceded that the company's best efforts to put the questions to
rest have not been successful.

Coca-Cola shares fell 17 cents to $43.88
in morning trading on the New York Stock Exchange. Its shares traded in a
52-week range of $38.30 to $51.85.